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While the final results are yet to be determined, whoever wins the US presidency probably faces continued gridlock in Congress. That may explain why the moves in markets overall so far have been limited. Admittedly, Treasury yields have fallen as the …
4th November 2020
We think that composite PMIs in Spain and Italy fell in October (08.15 & 08.45 GMT) We expect the ISM Services Index to have remained strong in October (15.00 GMT) The results of the US elections are expected on Wednesday Key Market Themes Unlike after …
3rd November 2020
Democrats lead in the polls ahead of Tuesday’s vote Central banks of Australia and Malaysia both likely to provide more policy support Switzerland’s inflation probably remained negative in October (07.30 GMT) Key Market Themes Treasury yields may rise …
2nd November 2020
While equity markets have fallen sharply over the past two weeks amid worries about the resurgence of new coronavirus cases in Europe and the US, there is little sign of the widespread market dislocations that accompanied the global spread of the pandemic …
We think that the Swedish krona will appreciate a little further against the euro and the dollar in 2021, but doubt that it will remain one of the best-performing G10 currencies, as it has been this year. The Swedish krona has been the …
Although uncertainty about the US election result might temporarily support the dollar, we expect it will continue to decline over the next few years given our forecast for loose fiscal and monetary policy. The ~5% rise in the dollar following the 2016 …
30th October 2020
Euro-zone Q3 GDP figures already old news with the risk of another contraction in Q4 rising US personal income likely to have edged lower as fiscal transfers lessened (12:30 GMT) Hong Kong’s economy probably returned to growth for the first time in a year …
29th October 2020
As the election campaign draws to a close, this Focus looks at how it has affected equity, bond, and currency markets so far and assesses how different outcomes could shift them after Election Day. This election campaign has already had greater impact on …
France and Germany to announce further restrictions to activity US GDP probably rose by 30% annualised in Q3, but recovery likely to have slowed since We think that the ECB will signal that more monetary stimulus is coming (12.45 GMT) Key Market Themes …
28th October 2020
It is looking increasingly likely that the Brazilian government will violate its constitutional spending cap, or at least the spirit of it. While this could lead to some ructions in the real and Brazil’s bond market, we think its equity market should …
South Africa’s inflation probably still near the bottom of central bank target range (09.00 BST) Bank of Canada likely to sound dovish, may outline options if outlook worsens (14.00 BST) Brazil’s central bank will probably keep policy rate at record low …
27th October 2020
Hopes for more debt relief for distressed EMs have been dampened in recent weeks. This Frontier Markets Monthly looks at why we are now at an impasse, the role of China, which EMs need help most, and how things might play out from here. What’s the current …
External demand probably helped Korea’s economy to rebound in Q3 (Mon., 22.00 GMT) We suspect that US durable goods orders dropped back in September (Tue., 12.30 GMT) Track the spread of COVID-19 and its impact on economies and markets here Key Market …
26th October 2020
US GDP probably rebounded strongly in Q3 (Thursday) We think that the ECB will provide further support for the euro-zone economy (Thursday) China’s leaders will meet to discuss the next Five-Year Plan in the coming week Key Market Themes The fact that …
23rd October 2020
We are sticking to our forecast that the 10-year German government bond (Bund) yield will end this year at around -0.50%, even though it has recently fallen through this level following a renewed surge in COVID-19 cases in Europe. To recap, the yield of …
22nd October 2020
We expect that Turkey’s central bank will its policy rates on hold (12.00 BST) Surge in COVID-19 cases may have weighed on euro-zone consumer confidence (15.00 BST) US Presidential election in focus as Trump and Biden face off in a final debate Key Market …
21st October 2020
We expect Korean trade data to show continued strong demand for electronics (01:00 BST) We think that UK inflation picked up in September (07:00 BST) Canadian retail sales growth probably accelerated a bit in August (13:30 BST) Key Market Themes The past …
20th October 2020
The loan prime rate in China is likely to remain unchanged at 3.85% (09.30 BST) We expect Hungary’s central bank to leave its base policy rate on hold (13.00 BST) Track the spread of COVID-19 and its economic and market impact here Key Market Themes We …
19th October 2020
We are upgrading our already above-consensus forecast for the Canadian dollar, as we expect higher oil prices, stronger-than-expected GDP growth, and favourable interest rate differentials to drive a continued appreciation over the next two years. Those …
Activity data likely to highlight the strength of China’s economic recovery (Mon.) Biden and Trump set to face each other in final Presidential debate (Thu.) October PMIs to shed light on the economic impact of the rise in virus cases in Europe (Fri.) Key …
16th October 2020
While sovereign dollar bond spreads in many emerging markets (EMs) are quite high by past standards, we think this is largely justified by the deterioration in fiscal positions caused by the coronavirus crisis . The stripped spreads of JP Morgans’s EMBI …
Outlook for UK and euro-zone economies worsens as new restrictions are put in place Euro-zone inflation data to shed some light on core rate fall in September (10.00 BST) US retail sales & industrial production likely to confirm that the pace of activity …
15th October 2020
We expect consumer prices in China fell due to lower food prices (02.30 BST) US jobless claims likely to show elevated level of layoffs (13.30 BST) Track the spread of COVID-19 and its economic and market impact here Key Market Themes While the S&P 500 is …
14th October 2020
While the S&P 500 is now above its pre-pandemic level, and US investment-grade corporate bond yields are even lower, we do not think that the valuations of “risky” assets in the US or elsewhere are unsustainably high. In fact, we expect equities and …
13th October 2020
We think that Singapore’s GDP rebounded strongly in Q3 (01.00 BST) Bank of Korea unlikely to change policy, with second COVID-19 wave fading (02.00 BST) Euro-zone industrial production probably edged up in August (10.00 BST) Key Market Themes Although the …
Some measures of valuation and risk-taking in Chinese equities have approached levels last seen prior to their crash in 2015. We think another crash is unlikely, but doubt equities will make much more headway in local currency terms. To recap, over a …
We think that China’s trade surplus grew in September (Tuesday) US CPI inflation probably rose in September (Tuesday) US retail sales and industrial production likely to have recovered further last month (Friday) Key Market Themes Investors’ recent …
9th October 2020
We think that UK GDP rose by about 5.0% m/m in August (07.00 BST) Canada’s unemployment rate probably fell below 10% in September (13.30 BST) Brazil’s headline inflation likely to have risen to around 3.2% last month (13.00 BST) Key Market Themes EM Asia …
8th October 2020
The yield of the EMBI Europe has risen since June and we doubt that it will fall back much over the coming year if geopolitical tensions involving Turkey and Russia persist . The yield of JP Morgan’s EMBI Europe Index (EMBI Europe) of emerging European …
We have revised up our already-bullish forecasts for the Australian dollar and the New Zealand dollar against the US dollar over the next few years, to reflect changes to our outlook for the Chinese renminbi. Crucially, though, this view hinges on …
Although the SNB meets the US Treasury’s criteria for a “currency manipulator”, we doubt this would deter it from intervening further in the foreign exchange market if required to keep the franc stable. New data detailing the SNB’s FX transactions confirm …
7th October 2020
Industrial production in Germany probably increased in August (07.00 BST) The Fed’s September minutes may clarify its forward guidance (19.00 BST) We expect Poland’s central bank to leave its policy rate on hold Key Market Themes If the recent rise in the …
6th October 2020
We expect a surprise rate cut from Australia’s central bank to 0.10% (01.30 BST) The US trade deficit probably grew in August (13.30 BST) Russia’s inflation may have ticked up in September (17.00 BST) Key Market Themes The resilience of the US stock …
5th October 2020
We expect the RBA to cut its policy rate and launch a second round of QE (Tuesday) The US trade deficit probably widened further (Tuesday) We think that UK GDP rose by around 5.0% in August (Friday) Key Market Themes The negative reaction in equity …
2nd October 2020
Euro-zone core inflation probably fell in September (11:00 BST) Brazil’s industrial production data likely to show the country’s recovery is slowing (13:00 BST) We think that US non-farm payrolls rose by about 800,000 in September (13:30 BST) Key Market …
1st October 2020
Recent moves by Angola and Zambia to restructure their public debts (or seek to) are unlikely to act as a trigger for a wave of similar steps by other debt-distressed frontiers. Indeed, their experience highlights the difficulties of reaching agreements …
30th September 2020
PMIs likely to show that most major economies continued to recover in September … … but rising case numbers in parts of Europe pose a threat to the economic outlook there We expect the Philippines’ central bank to resume its easing cycle after a pause …
In this Update , we consider the near-term outlooks for the yen, Japanese equities and government bonds under new Prime Minister Yoshihide Suga , and compare them with their performance in the early years of the tenure of his predecessor, Shinzo Abe. Abe …
29th September 2020
Although the Norwegian krone has been the worst performing G10 currency so far in 2020 (see Chart 1), we expect it to make up some lost ground in 2021 even if it falls a bit more in the near term. The US dollar rose sharply against most other G10 …
We expect GDP data to highlight the resilience of Vietnam’s economy this year (03.00 BST) UK consumer credit probably grew strongly in August, but that may not last (09.30 BST) Euro-zone economic sentiment indicator likely to have risen further in …
28th September 2020
China’s PMIs will probably show growth in the services sector slowing (Wednesday) The UK’s savings rate may have reached a record high in Q2 (Wednesday) We expect euro-zone inflation to have fallen close to zero in September (Friday) Key Market Themes On …
25th September 2020
Despite falling back a little this week, we still expect most currencies in the Asia-Pacific region to make headway against the dollar over the next couple of years, led by a stronger renminbi. As we set out here , we have changed our view on the Chinese …
Despite the sell-off in most emerging market currencies over the past week, we continue to think that most will strengthen against the US dollar as the global economy recovers. In particular, we have recently revised up our forecasts for the Chinese …
24th September 2020
The central bank of Mexico is likely to cut its policy rate later on Thursday (19.00 BST) We also expect policymakers in Colombia to cut interest rates on Friday (21.00 BST) The ECB may reduce interest rates on TLTROs as early as next month Key Market …
Germany’s Ifo Survey may have risen in September (09.00 BST) We think central banks in Switzerland and Norway will stand pat (08.30 & 09.00 BST)… …but expect Mexico’s central bank to cut its policy rate by 25bp (15.00 BST) Key Market Themes We doubt that …
23rd September 2020
BoE’s Bailey may provide hints about when negative rates would be used in the UK Euro-zone consumer confidence probably declined in September (15.00 BST) Rising coronavirus cases across Europe likely to trigger tighter restrictions Key Market Themes …
21st September 2020
While we continue to forecast that equity markets will make further ground in the next few years, the rapid increase in COVID-19 cases in Europe poses a downside risk to our projections. We have been arguing for a while that with the major economies …
We expect flash PMIs to show the euro-zone’s economic recovery slowing this month Policymakers in Mexico and Colombia likely to cuts rates at their forthcoming meetings … … while the central banks of Switzerland, Sweden and Turkey stand pat Key Market …
18th September 2020
Inflation in Japan probably fell further last month (00:30 BST) We expect UK retail sales to have risen slightly last month (07:00 BST) Surprise interest rate cut may be on the cards in Russia (11:30 BST) Key Market Themes Gilt yields have declined …
17th September 2020
Although policymakers in Japan may prefer a weaker yen, in our view it is more likely to rise than to fall. When Japan’s retiring prime minister Shinzo Abe came to power in late 2012, one of the key aspects of his “Abenomics” economic package was the …
